Government’s £1 billion ESA headache

The government will be forced to spend an extra £1 billion a year, after over-estimating how many people would be found “fit for work” through a controversial new assessment.

A report from the independent Office for Budget Responsibility (OBR) says the government is forecast to spend an extra £1 billion a year on employment and support allowance (ESA) – the replacement for incapacity benefit – by 2014-15.

Most of this increase is because the Department for Work and Pensions (DWP) over-estimated the number of disabled people who would be found “fit for work” through the work capability assessment (WCA).

Disability organisations had already raised fears that the government could inflict new cuts to spending on disability benefits, after it was forced to abandon plans to save £160 million a year by removing the mobility component of disability living allowance from people in residential care.

But DWP has told Disability News Service (DNS) that the government will not claw back the extra £1 billion a year spent on ESA from other benefits.

A DWP spokeswoman said the expected extra ESA spending would have “no impact on other benefits”, and added: “Our administrative budgets were agreed and set at the spending review for four years to 2014/15.

“Benefits expenditure is revised and published twice yearly at budget and autumn statement in line with the independent OBR forecasts.”

DNS reported in October that the monthly proportion of people found fit for work and so ineligible for ESA – after completing their assessment – dropped from as high as 68 per cent in 2009 to 55 per cent by February 2011.

Despite this evidence of improvement following a series of changes to the test, campaigners believe the WCA is still inflexible, inaccurate and unfair.

Meanwhile, the DWP has faced anger from activists and charities over proposals to force all cancer patients to prove they are not fit for work.

Until now, cancer patients receiving non-oral chemotherapy have been exempt from the WCA and placed straight in the ESA support group – for those who do not have to carry out any work-related activity – while those receiving oral chemotherapy or radiotherapy have had to face a WCA.

Cancer charities had asked the DWP to exempt all patients receiving oral chemotherapy and many of those receiving radiotherapy from the WCA because they said the side-effects of such treatments could be just as gruelling as non-oral chemotherapy.

Professor Malcolm Harrington, who is reviewing the WCA for the government, originally agreed with recommendations produced by cancer experts and 30 cancer charities.

But he changed his mind after the government said such a change risked “encouraging the wrong behaviours from employers and stigmatising cancer as something that can automatically lead to unemployment or worklessness”.

Ciarán Devane, chief executive of Macmillan Cancer Support, said the government’s proposals showed “a clear disregard and misunderstanding of what it’s like to undergo punishing treatment”.

He said: “Patients who previously had peace of mind would face the stress and practical difficulties of getting assessed for work they are too poorly to do.”

A DWP spokeswoman insisted that the government had not yet made any changes to how the WCA affects cancer patients.

She said: “The proposals within the Harrington review are just that, and having worked with Macmillan and others, we will continue to discuss with them how the WCA should work.

“This issue is an incredibly important and sensitive one for many people, which is why Professor Harrington has worked so closely with cancer charities.

“Everyone agrees that for some people being able to continue working or getting back into work after diagnosis is important and we want the WCA to effectively reflect that.”